What Is Competitive Analysis?
Competitive analysis is the process of analysing the strategy employed by competitors to stay ahead of them. It includes researching the competitors’ sales, products, SWOT (strengths, weaknesses, opportunities and threats) and marketing strategies.
Competitive analysis is important for a brand as it can build business strategies based on the analytical reports to gain a competitive advantage and create an opportunity to dominate the market.
How To Conduct A Competitive Analysis?
Josh Ronver, an American business consultant and author of ‘Unbreak the System: Diagnosing and Curing the Ten Critical Flaws in Your Company’, has laid down some critical points to remember while conducting a thorough competitive analysis.
He suggests starting with identifying the competitor’s products/services. For this, a brand needs to first identify the key offerings from its own product portfolio that are generating high revenue.
After identifying the unique selling points of its own products, the brand should identify businesses with similar products targeting the same market. This includes identifying companies serving the same market with different products.
Ronver also suggests analysing other businesses which offer different solutions but are addressing the same pain points.
Once the above have been identified, the brand must carefully examine each business’ pricing, distribution channels, market share, customer base, sales support, and marketing strategies.
The brand can then start gathering data on product features, target customers, staffing, and pricing and create a concise, actionable report with comparison charts and graphs. Based on the data analysis, the brand can enhance its products, services, pricing, and support and then track the results with profit and loss statements to assess the impact of changes.
Experts believe that brands can conduct a large-scale analysis once a year and a quarterly small-scale analysis.
What Is Competitive Landscape Analysis?
Simply put, competitive landscape analysis is the process of examining the market for direct and indirect competition. These are the five frameworks of a competitive landscape.
- SWOT Analysis: It involves examining the strengths, weaknesses, opportunities and threats of the competition in question. It helps generate insights for strategic planning to seize opportunities and counteract threats.
- Strategic Group Analysis: It is a method to organise competitors into groups based on criteria like product diversity, markets served and distribution channels. It helps pinpoint the closest competitors and understand competition relationships.
- The Boston Consulting Group Matrix (Growth-Share Matrix): This involves examining the competitors based on their growth rate and market share.
- Perceptual Mapping: It takes into account customer perception to analyse the competition.
- Porter’s Five Forces: This analysis of overall market competitiveness is based on competitive intensity, supplier power, buyer entry/exit costs, threat of substitutes, and new entrant access.
